HRA Exempt Tax Calculator

Name: HRA Exempt Tax Calculator
Price: 1.59 USD
Rating: 5 (1 reviews)

1 ByRammurthy Naidu | $1.59

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Supported Devices: HoloLens

Updated: May 16,2019

Size: 816 KB

Age: Everyone

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Description: HRA Tax Exemption Calculator.

Tax exemption calculator for House rent allowance.Save tax.

How much is HRA exempted?

The exemption for HRA benefit is the minimum of:
i) Actual HRA received
ii) 50% of salary if living in metro cities, or 40% for non-metro cities; and
iii) Excess of rent paid annually over 10% of annual salary

For calculation purpose, the salary considered is 'basic salary'. In case 'Dearness Allowance (DA)' (if it forms a part of retirement benefits) and 'commission received on the basis of sales turnover' is applicable, they too are added to compute the minimum HRA exemption available.

The tax benefit is available to the person only for the period in which the rented house is occupied.

Example of HRA calculation
Let's say an individual, with a monthly basic salary of Rs 15,000, receives HRA of Rs 7,000 and pays Rs 8,400 rent for an accommodation in a metro city. The tax rate applicable to the individual is 20 percent of his income.

To avail HRA benefit, the least of the following amount (yearly) is exempted, rest is taxable:
i) Actual HRA received = Rs 84,000
ii) 50% of basic salary (metro city) = Rs 90,000 (50% of Rs 1,80,000)
iii) Excess of rent paid annually over 10% of annual salary = Rs 82,800 (Rs 1,00,800 - (10% of Rs 1,80,000))

It shows that of Rs 84,000 actually received as HRA, Rs 82,800 gets tax exemption and only the balance of Rs 1,200 gets added to the employee's income, on which a tax of Rs 240 ( 20 per cent slab ) gets payable.; MoreLess